Price Elasticity Scenario

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Price Elasticity Scenario Overview Carlos Cruz is an inventor and entrepreneur who developed and patented a proprietary technology. The purpose of this technology is to scan printed media for text materials and then create a new digital file. The technology also has the option of reading the content digitally on different devices as well as listening to the content read by a realistic synthetic voice. Carlos has a business plan that focuses on selling these digital books online and he believes that he has developed a business model that can be success. However, Carlos is currently facing a major dilemma concerning about how to price his product so that it can be competitive in the market. This brief analysis will illustrate some of the economic principles that are relevant to the decision that Carlos faces and evaluates different option in which he might select from. Resource Scarcity The notion of the scarcity of resources is at the heart of economics and economic theory. The definition of a scarce resource is as follows (Economic Glossary): A resource with an available quantity less than its desired use. Scarce resources are also called factors of production. Scarce goods are also termed economic goods. Scarce resources are used to produce scarce goods. Like the more general society-wide condition of scarcity, a given resource is scarce because it has a limited availability in combination with a greater (potentially unlimited) productive use. These resources can be

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